Supreme Court upholds tribunal order on service tax on Patanjali camps

Appellate tribunal had held Patanjali liable to pay service tax on yoga camps

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Ramdev and Patanjali MD Acharya Balkrishna after voting in Haridwar. ANI

The Supreme Court on Friday refused to intervene with the October 5, 2023, order of the Allahabad bench of Customs, Excise And Service Tax Appellate Tribunal (CESTAT), which said Patanjali Yogpeeth Trust was liable to pay service tax on its residential and non-residential yoga camps as it charged an entry fee.

Disposing of an appeal by the Trust, a bench of Justices A S Oka and Ujjal Bhuyan said CESTAT was right in categorising it as a “health and fitness service”. CETSAT had also rejected the Trust’s contention that what it received from participants of the yoga camps was donation.

The Patanjali Trust had approached CETSAT to challenge the October 2012 order of the Commissioner of Customs & Central Excise, Meerut, confirming the demand of service tax amounting to Rs 4.94 crore, and an equal amount as penalty, from it.

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Arguing before CESTAT, the Trust contended that its activities were not taxable under the health and fitness services as per the definition as it extended to yoga for physical fitness and not yoga for therapeutic purpose.

The Trust also said that what it accepted from the participants of these yoga camps was voluntary donation and not a consideration for any service to be provided.

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Rejecting the Trust’s appeal, CETSAT relied on the definition of “health and fitness service” in the Finance Act, 1994 as meaning “service for physical well-being such as sauna and steam bath, turkish bath, solarium, spas, reducing or slimming salons, gymnasium, yoga, meditation, massage (excluding therapeutic massage).”

On the Trust’s contention that what was received was donation, CETSAT said “it is quite evident that the amounts… was nothing but the consideration for the provision of service taxable under health and fitness services”.

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